Telecoms and Technology Report Israel

Israel's telecommunications sector is the largest and most robust in the Middle East. The bulk of revenue comes from mobile communications, with fixed-line, cable and satellite accounting for a far smaller share. With increased competition in most retail subsectors and prices falling, suppliers will move to widen their offering with convergence on both fixed and mobile, Internet and television services, as far as regulators will allow.

The Israeli market for technological goods is fairly mature, particularly in mobile telephony. According to a 2011 survey by the Central Bureau of Statistics, 71% of Israeli households had two or more mobile phones and 78% owned a computer. Computer ownership and Internet connectivity is about average by OECD standards. There is strong competition across fixed-line, mobile, and Internet services. Internet use is widespread; e-commerce is widespread but less developed than would be expected from such a "connected" country. Consumer demand is fairly robust.

Third-generation (3G) and data-rich services are expanding quickly, and work on the infrastructure for next-generation 4G and LTE (long-term evolution) networks in the early years of the forecast period should further boost growth in the sector in the second half of the forecast period. Growth in 3G uptake-a service offered by all the networks-will moderate as the technology matures. The government hopes to have completed the 4G licence tendering and allocation process by the end of 2013.